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ECONOMICS
Economic Development and Transition - Ch 18
1)
What is development?
It is the process by which a nation improves economic, political, and social well being of its people.
2)
Why are developed nations sometimes referred to as industrialized nations?
Developed nations usually have adequate industrial facilities for producing consumer and capital goods, and they are
therefore, sometimes referred to as industrialized zones.
3)
Why is per capita GDP a better measure of development than GDP?
Per capita GDP shows how much of the nation’s product is being created per person rather than the total production in
the country. It can also indicate people’s living standard, depending on income distribution within the country.
4)
What role does infrastructure play in a nation’s development?
The quality of infrastructure determines that nation’s capacity to produce.
5)
6)
List three characteristics of developed nations?
1.
Increased consumer spending
2.
Fully industrialized
3.
High agricultural output
4.
Health population
5.
Educated population
6.
Developed infrastructure
List three characteristics of less developed countries?
1.
Low capita per GDP
2.
Low energy consumption
3.
Low level of industrialization
4.
Subsistence agriculture
5.
Low literacy rate
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7)
How does arable land play an important role in nation’s development?
The amount of arable land – land that can be used for farming – affects the agricultural output of a nation.
8)
How does malnutrition affect human capital?
All of the following problems can greatly hinder the development of human capital. Malnutrition causes:
9)

Low birth weight in infants

Brain damage in infants

Birth defects in infants

Slows physical and mental development of a nation’s youth

Lethargy, heart disease, and other health problems for adults
Why are many less developed countries carrying a large burden of debt?
In the 1970s and 1980s, many LDCs borrowed to finance development. Rising oil prices, which necessitated more
borrowing, and the appreciation of the U.S. dollar hindered repayment.
10) What is foreign direct investment?
It is the establishment of an enterprise by a foreigner.
11) Identify three factors necessary for the transition to free enterprise?
1.
Privatization
2.
Protecting property rights
3.
Accepting new roles for government
12) Why is privatization necessary to create a free market economy?
It gives individuals, rather that government, the right to decide what to produce and how much to produce which is a
basis of free market economies.
13) What is glasnost?
A political policy of “openness” introduced by the Soviet Union in the late 1980s.
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14) What is perestroika?
Soviet leader Gorbachev’s plan for economic restructuring, which called for a gradual change from a centrally planned
system to free enterprise.
15) Why was the Great Leap Forward such a disaster for China?
It failed because it provided little incentive for workers, so it caused a decrease in production and eventually famine.
Week 20 of 21.
The 6th and LAST quiz towards your Final
Done!
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